April 3, 2003, Thursday

KR-ACC-NO: AT-DEEDS

LENGTH: 431 words

HEADLINE: Federal Officials Lobby to Loosen Georgia Deed-Handling Rules

BYLINE: By Tinah Saunders

BODY:

   The U.S. Department of Justice and the Federal Trade Commission want to help Georgia consumers save money when buying a home.

   The FTC and DOJ want to allow non-lawyers in Georgia to prepare and facilitate the execution of deeds, an activity now considered "unlicensed practice of law" by the State Bar of Georgia.

   Permitting non-lawyers to provide these services will increase competition and reduce closing costs, according to a letter sent by the DOJ and FTC to the Bar's Standing Committee on the Unauthorized Practice of Law last month.

     The committee held a public hearing on the matter March 21 after receiving numerous complaints about non-lawyers conducting closing procedures.

   The Georgia Legal Code prohibits anyone other than a licensed attorney from furnishing legal services such as the "conveyance" or transfer of real property or title. Those who do may be charged with a misdemeanor and are subject to up to a year in prison and/or fines.

   Bob Hamilton, executive vice president of the Georgia Association of Realtors, said using non-lawyers in real estate closing functions would not guarantee lower costs.

   "Allowing non-lawyers to deal in closings would not be beneficial to the consumer at all," Hamilton said. "If you look at the paperwork, you'll see that the lender gets most of the money [from fees at closing], not the lawyer. His fee is nominal --- $450 on the sale of a $300,000 house.

   "There are already too many lawyers doing closings and they undercut each other all the time, so there is already competition. Besides, you don't know what a non-lawyer would charge --- and then if there is a problem with the closing, you'd have to hire a lawyer to straighten it out," he said.

   Non-lawyers who might prepare and facilitate paperwork include real estate agents, bankers and insurance adjusters. Several states, including Virginia and New Jersey, have rejected bans on non-lawyer closing functions.

   The Bar's Standing Committee on Unauthorized Practice of Law will discuss the situation and decide whether to publish an opinion. The opinion, if reviewed by the Georgia Supreme Court, could set legal precedent in the state.

   But deciding whether to issue an opinion could take a while.

   "The committee has the matter under advisement, but resolution may take several months," said Steven Kaczkowski, the director of Unauthorized Practice of Law for the Georgia State Bar Association.

   -----

   To see more of The Atlanta Journal-Constitution, or to subscribe to the newspaper, go to http://www.ajc.com
 

JOURNAL-CODE: AT

LOAD-DATE: April 4, 2003
Copyright 2003 IOMA
Law Office Management & Administration Report

April 2003

SECTION: Pg. 10

LENGTH: 526 words

HEADLINE: Why Plans to Better Leverage Paralegals Often Don't Produce

BODY:
Law firm leaders keep telling LOMAR that they
have a hard time utilizing paralegals effectively, despite the obvious benefits. Why? There are many reasons, but an interesting assessment of the problem from James Wilber, a principal with Altman Weil, Inc., places the fault on the so-called "legal food chain."
 
"It's a common impediment," he explains in a recent edition of Practice Management Flash Points, published by the Illinois Institute for Continuing Legal Education (IICLE; Springfield, 800-252-8062; www.iicle.com). "Without question, the chief reason for the underutilization of paralegals in most law offices is that there are too many lawyers competing with legal assistants for work." This is particularly true, Wilber adds, when there are too many inexperienced lawyers and too little lawyer-level work to keep everyone busy.

    Wilber writes that lawyers have confided that at least 25% of what they do could be handled by paralegals but isn't, due to the oversupply of lawyers. In their offices, some lawyers are handling work better left to paralegals and, in turn, some paralegals are doing work better left to secretaries. The result: Boredom for the legal assistants, a dearth of professional challenges, and a decline in profitability for partners.
 
"So long as there is too little lawyer-level work to 'feed' a law firm's lawyers, as members higher up on the food chain, they will reach down to the paralegal level and take what they need to keep themselves sated," Wilber maintains.
 
Law firm leaders must analyze the complexity and volume of legal work available in the firm. And, if there is too little work appropriate for handling by lawyers, confront the issue. The solution may take some time. You don't want to dismiss junior lawyers: Firms that take this approach risk destroying their recruiting efforts for years to come. Discharging experienced lawyers could have a similar unfortunate effect.
 
The best way to improve paralegal leverage may be to hire a paralegal instead of a new attorney when the next vacancy occurs. Each open lawyer slot provides an opportunity to assess your law firm's mix of lawyers and legal assistants and hire accordingly.
 
For more information: For a sampling of data from Altman Weil's 2002 Survey of Law Firm Economics that you can use as a starting point for discussions in your firm, see the table, "Ratios of Paralegals to All Lawyers."
 
 For information on the complete survey, call 610-886-2000 or go online to www.altmanweil. com.

______________________________________________________________________________

>Ratios of Paralegals to All Lawyers
>
> Average Ratio,
> All Firms
>
>Population size
>1 million or more .28
>250,000 to 999,999 .28
>Less than 250,000 .32
>
>Firm size
>Less than nine lawyers .36
>Nine to 20 lawyers .36
>21 to 40 lawyers .27
>41 to 75 lawyers .27
>76 to 150 lawyers .24
>More than 150 lawyers .32
>
>Practice area
>Commercial litigation .31
>Corporate/commercial non-litigation .25
>Insurance defense litigation .28
>Intellectual property .37
>Labor/employment .14
>Plaintiffs' contingency litigation .69
>General law .27
>Other .41
>
>All firms .28
>
________________________________________________________________________________
 
 

LOAD-DATE: March 11, 2003
Copyright 2003 ALM Properties, Inc.

All Rights Reserved.
Texas Lawyer

March 31, 2003

SECTION: FRONT COVER; Vol. 19; No. 04; Pg. 1

LENGTH: 1103 words

HEADLINE: A Taxing Rival
Bills Propose Allowing Nonlawyers to Collect Delinquent Funds

BYLINE: John Council

BODY:

   While tort reform legislation pulsing through the Texas Legislature makes some plaintiffs lawyers feel as if they have huge targets painted on their backs, they aren't the only attorneys lawmakers are taking a shot at.

   Other bills pending in the Legislature could break the near monopoly some lawyers have on collecting tax debts for local governments.

   Two bills, H.B. 1951 and S.B. 1267, would allow nonlawyers to perform the lucrative delinquent tax collection function by permitting taxing agencies to contract with "an attorney or other person."

   Those bills should make for an interesting fight as several firms - including Linebarger, Goggin, Blair & Sampson and Perdue Brandon Fielder Collins & Mott - have at least six lobbyists who are working to make sure the bill doesn't pass, say three attorneys involved in the debate.

     "As far as I can tell, it's the only type of collection business that is restricted only to lawyers," says Terral Smith, a partner in the Austin office of Locke Liddell & Sapp who is one of the few lobbyists pushing for the bill's passage.

   Smith, a lobbyist for RE Robert, a Virginia-based collection agency that wants to break into the Texas tax collection market, alleges that a handful of Texas firms handle about 75 percent of delinquent tax collection duties for local governmental entities, such as school districts.

   "They would argue they do a great job and a monopoly is good," Smith says of firms such as Linebarger, Goggin - one of the largest tax collection law firms in Texas that is fighting the bill. "It [the legislation] will bring some competition and that's got to be good."

   But Dale Linebarger, a partner in Linebarger, Goggin, says there's plenty of competition in delinquent tax collection among about 40 law firms in Texas. Allowing nonlawyers to perform tax collection duties in Texas isn't in the public's best interest, he says.

   "The belief we have is that every step of the way involves some aspect of a legal question that affects a taxpayer," Linebarger says of delinquent tax collection. His firm hired two lobbyists to fight the bill, he says.

   Allowing nonlawyers to collect taxes would be a disaster, Linebarger says. "It would be like giving a private security agency the same power as the city of Houston Police Department."

   While efforts to weaken the hold firms have on tax collection failed in past legislative sessions, legislators and lobbyists may be particularly amped up over the issue because of the indictment of Juan Pena.

   Pena, a former partner in Linebarger, Goggin, was indicted last year for allegedly conspiring to bribe two San Antonio city councilmen for a city collection contract. Pena has pleaded not guilty to the charges and denies the allegations.

   "I think what we need to do is to open up the process so we don't run the risk of having situations like the one that did take place in San Antonio," says Rep. Fred Hill, R-Richardson, the sponsor of the House bill.

   "I just think it's very important that the Legislature not give exclusive responsibility for such an important task just to lawyers," Hill says. "When we passed this [law], it was the Lawyer Employment Act, and it has negative repercussions for the Legislature, and it reflects badly on the Legislature."

   H.B. 1951 and S.B. 1267 are pending in committees.

   No Big Woop?

   Linebarger says it's unfortunate that some proponents of the bill are using Pena's troubles as a way to advance their case.

   "The rumor that I've heard is there's been a piling on effect by some of our competitors who can't compete in the marketplace so they try to smear us with the problems of our former partner," Linebarger says. "But in my opinion, they can't compete in the marketplace so they try to do it in the back halls of the Legislature."

   Sen. Bill Ratliff, R-Mount Pleasant, who's sponsoring the bill in the Senate, says he doesn't plan to mention Pena's name as part of the debate.

   "I don't consider this aimed at any particular person or agency group or firms," Ratliff says. "I'm just a big advocate of local government and local control. And I don't see any reason for the state to dictate any method of collection."

   Randall "Buck" Wood, a partner in Austin's Ray, Wood & Bonilla, a law firm that does some delinquent tax collection business, says he's not opposed to competition from nonlawyers.

   But Wood has a problem with a provision in Hill's bill that allows the taxing agency to tack an additional 20 percent to the delinquent tax bill to help pay for the collection fees. He says that puts nonlawyer tax collectors at an advantage.

   Nonlawyer collection agencies "want to be able to kick back fees to the taxing entity. Lawyers can't do that," Wood says. "We can't split fees with our clients. But they are looking for an advantage. As a matter of policy, you don't want to get in a war over kickbacks."

   Even if the bill passes, several attorneys familiar with the delinquent tax collection process doubt that nonlawyers will be successful in collecting taxes - they can't go to court and enforce a tax lien on a delinquent taxpayer.

   "Let's say that the nonlawyer gets hired to do debt collection. They send some demand letters. By the time you get a demand letter, [the tax debt is] in pretty bad shape," says Leland De La Garza, a partner in De La Garza & Wallace and chairman of the Dallas Unauthorized Practice of Law Subcommittee. De La Garza says he is not speaking for his UPLC subcommittee.

   In De La Garza's opinion, all the nonlawyer has the authority to do is write a few letters. "And then they turn it over to a lawyer. That's all it can be."

   But Jim Collins, a partner in Perdue Brandon, believes that nonlawyers violate the unauthorized practice of law statute by attempting to collect delinquent taxes, even in the early stages of that process.

   "There isn't a breaking point where you leave the letter writing and dunning process and begin the practice of law. It's the practice of law all of the way through," Collins says. "We have to make an immediate determination of which accounts are in bankruptcy, and when bankruptcy stays affect us. The courts have found that reading those bankruptcy documents is the practice of law."

   Jim Jackson, a Dallas County commissioner, says when taxing entities choose their collectors, they're likely to look at who will be the most effective, regardless of whether they hold law degrees. Dallas uses Linebarger, Goggin, and has had no problems, he says.

   "I don't think it would make any difference to us," Jackson says. "I think it would matter who would do the best job."

LOAD-DATE: March 31, 2003
Copyright 2003 U.P.I.
United Press International

March 28, 2003 Friday

LENGTH: 1425 words

HEADLINE: Commentary: Joe Bob's Week in Review

BYLINE: By JOE BOB BRIGGS

DATELINE: NEW YORK, March 27 (UPI)

BODY: A mysterious disease that started in Hong Kong has killed 386 people in 14 countries since Feb. 1 and is now classified by the World Health Organization as a global threat. Scientists at Hong Kong University are trying to isolate the suspected virus, working in maximum security labs where all rooms are steam-cleaned and all masks and gowns are burned after use, but they don't expect their research to be fully funded until the disease strikes in a place where people think of themselves as immortal. We speak, of course, of California.
 
Posters for "What a Girl Wants," starring Amanda Bynes, were airbrushed by Warner Brothers to eliminate the peace sign she was flashing. Studio officials said they didn't want any "political overtones" to be associated with the movie's April 4 release. The movie tells the story of a 19-year-old girl (Bynes is actually 16) traveling from New York to London for a reunion with her upper-class father, played by Colin Firth, and her efforts to fit into British society. One way she could probably fit into British society would be to tell them she thinks people who flash peace signs should be suppressed like the Zulus.

    Johnny Paul Penry has been convicted three times since 1979 of raping and killing a woman in Livingston, Texas, but the first two convictions were thrown out after Penry's lawyer, John Wright, appealed them all the way to the Supreme Court. But now that it's time for the third appeal -- based on Penry's mental retardation, as the other two were -- Wright has been removed from the case by the presiding judge, Elizabeth E. Coker of Polk County District Court, even though Penry expressly wanted to be defended by him. Her explanation: what if Penry someday argues that his defense counsel was ineffective? That would create a conflict of interest for Wright. In case you didn't follow that, she's speculating as to all the various reasons that Penry might someday say he got an unfair trial, and one of them could possibly be that he wants to turn on the attorney who has kept him alive for 24 years. To make sure he doesn't do that, she'll protect him by removing the attorney of his choice and replacing him with Stephen C. Taylor, who assisted the prosecution during Penry's third trial. Since Taylor's already read the file, it has the added advantage of saving time. Coker is the same judge who ruled that Penry is not mentally retarded. To prove it, she asked him to spell "lethal injection." Close enough.
 
The president asked Congress for $74.7 billion to finance six months of war in Iraq, but warned that the figure doesn't include any other related contingencies that may arise, such as the Pentagon's planned invasion of southern France to destroy the regime of Jacques Chirac.
 
One day before 12 German high school students were scheduled to depart for Murfreesboro, Tenn., as part of an exchange program with Oakland High School, principal Tim Tackett told them not to come -- and he canceled his own students' trip to Hamburg this summer as well. After all, we don't need young people being indoctrinated into seditious ideas like . . . uh . . . foreign nations having opinions.
 
Penguin excrement is so thick around "Borchgrevink's Hut," the first building in Antarctica, that it will soon be buried in manure. About 100,000 Adelie penguins enjoy defecating on the structure erected by Norwegian explorer Carsten Borchgrevink in 1895, and conservationists say it's impossible to shovel fast enough. Potty training has not yet been ruled out.
 
Riots broke out in Warri, Nigeria, with at least 20 killed, as Urhobos fought against Itsekiris in a dispute over "the location of government offices and amenities." Hey, punk, don't even THINK ABOUT moving that regional tax-assessment bureau from Urhobo to Itsekiri territory.
 
The Hardy Boys turned 76 this year, but they just had their 176th adventure, called "In Plane Sight" and released by Simon & Schuster. All 176 books have been authored by Franklin W. Dixon, who is fortunately not a real person, thereby making it possible for him to continue to create new Hardy Boys adventures for as many years as the market will support them. Since both Hardy Boys are teenagers, and since their first adventure was in 1927, they have to be at least 90 years old at this point, but they managed to avoid mid-life crises, not to mention Alzheimer's, by simply refusing to leave home.
 
Fusion Baptist Church, the first gay Baptist church, opened in Philadelphia. It's okay to be homosexual, just don't try to dance.
 
The American Bar Association proposed a law barring non-lawyers from giving legal advice, negotiating on behalf of others, or drafting legal documents. The proposal could affect tax preparers, real estate agents, investment bankers, business planners, accountants, hospitals, labor unions, tenants' associations, and claims adjusters, not to mention half the judges who have TV shows.
 
Police responded to 38 million burglar alarms in 1998, according to a Justice Department report, and 98 percent of them were false alarms. The nation is currently using 35,000 police officers to respond to false burglar alarms, at a cost of $1.5 billion annually, and at a time when the jails are already full of false burglars.
 
The famous Howard Johnson's restaurant in Times Square -- one of the first four HoJo's in the country, and one of the last 10 remaining in business -- will close to make way for yet another megastore of some type. Morris Rubinstein, the original owner and personal friend of Howard Johnson himself, isn't alive to see the decline of orange and turquoise Naugahyde, thank God.
 
French police now have a way to ferret out fake truffles. They've broken the genetic code of the truffle fungus, and can tell the difference between Tuber melanosporum, the French variety from Perigord that sells for $140 a pound, and Tuber indicum, the Chinese variety that sells for a mere 10 bucks a pound. Since 1994 some unscrupulous restaurateurs have been passing off Tuber indica as Tuber melanospora, much to the disgustibus of Pierre's palate.
 
Gov. Eric Chiwaya of Blantyre, Malawi, was stoned by an angry mob convinced that he's entered into a pact with vampires to harvest human blood through international aid agencies. One man has been killed in various vigilante attacks directed at priests and aid officials known to be pale and toothy.
 
Forces of the Congolese Liberation Movement are killing and eating Pygmies, according to reports being investigated by the United Nations. Then they're hungry again an hour later.
 
Larry Pratt of Olathe, Kansas, was arrested and charged with urinating on packages of chicken in a supermarket cooler. No one ever lets him have the drumstick.
 
Two pots of marijuana were found growing on the roof of the Lakeview Baptist Church in Delray Beach, Fla., explaining why the speaking in tongues in recent weeks has been punctuated by inappropriate grinning.
 
Elmer Grandin, an actor who died in 1933 after a career on Broadway and in silent movies, appeared at a Thanksgiving weekend party in Patchogue, N.Y., wearing a Darth Vader mask and glasses, thanks to three Long Island teens who had cracked open his family crypt and dressed him up along with the skulls of two of his relatives. Police described the three teenagers as "Goths." We already figured that out.
 
Scenes from domestic life:

   -- Teenager Reginald Ted Antoine of Brooklyn was upset when money left to him by his mother was managed by his stepfather, Reynold Guerrier, so he flattened the tires on his step dad's car and, while the father was picking up one of his four children to walk him to school, shot him dead, police say. Reginald will presumably be able to draw on his inheritance for use at the Sing Sing gift shop.
 
Scenes from our secure republic:

   -- Robert Mickens, a Greyhound bus driver who works a rural route in central New Jersey, used the word "Taliban" during a good-natured public address announcement, and soon thereafter was ordered off the bus by police and led away in handcuffs. For all we know he could have been planning to hurt himself with a box-cutter, wrestle control of the bus away from himself, and drive the bus into a building, killing the driver.

   (Joe Bob Briggs writes several columns for UPI. Contact him at joebob£upi.com or through his Web site, joebobbriggs.com. Snail mail: P.O. Box 2002, Dallas, Texas 75221.)

LOAD-DATE: March 29, 2003
Copyright 2003 Dolan Media Newswires
Wisconsin Law Journal (Milwaukee, WI)

March 26, 2003 Wednesday

SECTION: NEWS

LENGTH: 1243 words

HEADLINE: Candidates for Board of Governors for Madison, Northwestern Districts

BYLINE: Jane Pribek

BODY:

   It's a rite of spring for every lawyer in the state: the arrival of ballots in the officer elections of the State Bar of Wisconsin. (Look for them during the week of April 11, to be returned on or before April 25.)

   This year, there are contested races for seats on the Board of Governors, the representative body of the state's 20,000-plus lawyers, in districts 2, 9 and 11.

   Last week, Wisconsin Law Journal took a glance at the candidates in District 2, Milwaukee. This week, we're looking at the other two districts.

     District 9-Madison

   In Madison, four candidates are vying for three spots on the board.

   The lone incumbent is Kent I. Carnell, with Lawton & Cates S.C.

   Carnell says that prior experience is extremely helpful because it takes a new governor a few meetings to become familiar with the issues and how the board operates. Further, as a lawyer for the past 30 years, he's also familiar with changes in the practice of law, as well as the perspective of the public over that period of time.

   Carnell identifies two areas where he believes the Board of Governors has served its membership well while he has been a member: the Branding Campaign and multidisciplinary practice.

   The Branding Campaign has made great strides for improving the public's perception of lawyers, he opines.

   As for MDP, last fall the governors rejected a recommendation from a majority of the bar's Multidisciplinary Practice Commission that called for petitioning for a change to the lawyer ethics rules to allow MDPs with lawyers as majority owners. The governors were more favorable, however, to the MDP Commission's recommendations about curbing the unauthorized practice of law.

   "I believe the board needs to continue its work on the unauthorized practice of law issue, so that can be clarified for both lawyers and nonlawyers," Carnell says.

   "In addition, I am on a committee that is analyzing the new ABA Standards for Negotiation and comparing it to a less comprehensive document drafted by Wisconsin lawyers. I believe we can come up with recommendations that will be helpful to lawyers and the public on this issue," he states.

   Also seeking a seat is John L. Cates, of Gingras, Cates & Luebke S.C. Cates says, "I have been practicing law and representing individuals for 23 years. Through this experience, I have learned that our job as attorneys is to serve people. With the advancement of technology and all of the changes going on in the world, it is my belief that the number one job should be to protect the freedom of individuals, and it should be our job as members of the Board of Governors to see to it that our lawyers are dedicated to this proposition."

   Like Carnell, Cates is concerned about the public's perception of lawyers. "In many cases, we are looked at as the enemy versus the body that has taken on the job of protecting the laws that govern us," he remarks. "It would be my desire to work with the Board of Governors to try to improve our image in the public's eye and to promote the fact that our job, above all, is to protect the rights of individuals and their freedoms."

   Robert J. Lightfoot II, of Murphy & Desmond S.C., is also in the Madison race. Lightfoot says that his diverse background would serve him well as a governor; he was a registered nurse for nine years before attending law school. He has been involved in activities to advance both professions. Moreover, both nursing and lawyering have required him to learn to problem-solve and negotiate in difficult situations.

   As for what he'd apply those skills toward as a governor, Lighfoot strikes a familiar chord. "One of the major challenges that continues to face the bar is the negative public perception of lawyers. I support the public education initiatives taken by the bar thus far, and also support exploring other ways to improve the public perception of lawyers."

   The final Madison candidate is Deborah M. Smith, the Director of Assigned Counsel for the State Public Defender's Office. In that role, she oversees the agency's 900-plus private bar attorneys.

   Her unique qualification, she says, is her experience in three areas: as an assistant public defender for close to 23 years, a WisTAF board member for four years and a member of the Board of Administrative Oversight of the Office of Lawyer Regulation. It's valuable experience in the provision of legal services to the indigent, lawyer trust accounts and attorney ethics, three areas in which a Board of Governors member should be well-versed, she reasons.

   Smith adds that among the bar's top priorities should be the expansion of pro bono and serving its members and the public.

   District 11-Northwestern Wisconsin

   The incumbent in this race is Howard J. Bichler, of the St. Croix Chippewa Indians of Wisconsin in Rice Lake.

   Bichler's practice, he says, has been geared toward litigation and the representation of low-income individuals, with Wisconsin Judicare and tribal clients, and he has engaged in an extensive economic development practice for the past ten years.

   Bichler says he's been actively involved with the State Bar since his law school graduation, and that most recently, he served for two years on the Board of Governors and one year on the Executive Committee. Like Carnell, he says that experience is valuable -- looking at what the board has done in recent years, and what lies ahead.

   "Many issues, including multistate practice, the unauthorized practice of law and the power of the board with regard to amicus briefs will continue to be debated," he predicts.

   Another hot topic, according to Bichler, is defining the bar's mission as a mandatory association, and providing the greatest amount of services to its membership:

   "The issue of amicus participation forces the bar leadership to confront the issue of participation in issues vital to the bar while respecting the will of a significant minority or even a majority of the bar who would oppose amicus participation. Is the bar merely a service provider or should its mission be broader and encompass participation in issues that involve significant difference of opinion among members of the bar? I believe the broader model is the correct approach."

   Challenging him is Kenneth A. Knudson of Hendricks, Knudson, Gee, Torvinen & Welby S.C. in Superior.

   Knudson, a practitioner for over 26 years, says his general practice litigation experience, and his experience advising small businesses, school districts and personal injury law has provided him with a valuable perspective on what practitioners in his part of Wisconsin face in keeping their firms and practices viable. Knudson additionally cites his extensive experience as a mock trial coach, which helps him stay in touch with his community.

   "The biggest challenge facing the Bar of District 11 is balancing our need to keep current with and adapt to the changing needs of society and how we practice law with the reality of running a small or medium-sized law office in Northern Wisconsin. It's important to encourage the bar to maintain its programs for small and medium firms and solo practitioners," he says, noting that improving the public image of the legal profession and maintaining programs such as mock trial are also key goals for the association.

   Knudson adds that he has serious misgivings about multidisciplinary practice, and he prefers the bar take a leading role in limiting the unauthorized practice of law.

LOAD-DATE: March 26, 2003
Copyright 2003 ALM Properties, Inc.

All Rights Reserved.
Fulton County Daily Report

March 25, 2003, Tuesday

SECTION: NEWS; Vol. 3; No. 25

LENGTH: 1251 words

HEADLINE: Nonlawyers: Letís End Lawyersí Monopoly on Real Estate Closing Business

BYLINE: Richmond Eustis

BODY:

   Both sides claimed to be protecting the consumer Friday in a forum sponsored by the State Bar of Georgia on whether nonlawyers should be allowed to preside over real estate closings.

   Lawyers argued that nonlawyer closings would leave homebuyers vulnerable to fraud. They also argued that nonlawyers were engaging in the unauthorized practice of law. Title company and bank representatives said nonlawyer closings would save homebuyers money.

   Baton Rouge lawyer Lane N. Bennett, managing member of Title2Land, told the State Bar's Unlicensed Practice of Law Committee that Georgia closing attorneys are more prone to "clearing calendars because you have a golf game" than to scheduling and handling closings efficiently. Banks and national title search companies bring in companies like Title2Land to handle closings, Bennett said, because Georgia lawyers take too long to schedule closing appointments, charge ridiculous fees and work "bankers' hours."

     "You are the only game in town and you know it and that's the problem," Bennett said. "You don't do it timely and efficiently."

   Bennett said Title2Land has handled 100-200 closings in Georgia since it started work here about six months ago and is continuing to find work here. When a client hires him to do work in Georgia, Bennett said, Title2Land contracts with one of a handful of lawyers in Georgia to perform any legal duties that need to be done. But Georgia's requirement that a Georgia lawyer must be present at closing is cumbersome and inefficient, he said.

   Bennett was one of the last speakers in a three-hour discussion over the question of whether a nonlawyer who prepares and executes deeds in real estate closings is practicing law without a license. The bar plans to draft an advisory opinion on the topic for consideration by the Georgia Supreme Court.

   The lawyers' consensus was that under O.C.G.A ß 15-19-50, conveyancing property, preparing legal documents and rendering opinions about the validity of title are all practicing law. And a 1989 advisory opinion from the Georgia Supreme Court made it clear that closings constitute the practice of law. A nonlawyer who performs these services, the court said, was clearly practicing law without a license.

   Driving Down Costs

   However, the debate centered on whether that should remain the case. Bennett, Omni National Bank CEO Stephen M. Klein and a handful of real estate agents, paralegals and consultants suggested that the work is not especially daunting and that allowing nonlawyers to do it would drive consumers' costs down and make the process more efficient.

   Several states already permit nonlawyer closings, with title companies licensed and supervised by the state handling real estate transactions. And recently the Federal Trade Commission has lobbied in favor of lifting the bar's monopoly on handling closings. Most recently, the FTC wrote a letter to the North Carolina state bar urging it to lift its ban on nonlawyer closings. Such a move, said the letter, would allow customers to "enjoy the fruits of competition between lawyers and nonlawyers: lower prices and more choices in how and when closing services are provided."

   The issue became heated in Georgia when the Georgia Real Estate Closing Attorneys Association sued Omni Title Services Inc., accusing the title company of using nonlawyer employees to preside over closings [Daily Report, Jan. 30, 2003]. Omni denied that it ever used lay people to perform legal tasks.

   Fulton Superior Court Judge Doris L. Downs dismissed the case without reaching the merits, because the GRECAA lacked standing. GRECAA v. Omni Title Services, no. 2002CV54444 [Fult. Super. June 13, 2002].

   Ganek, Wright & Dobkin's Jeffrey P. Ganek, a former president of GRECAA, spoke about the perils of "witness only" closings, during which lawyers may be present, only to "sit there like a bump on a log with a notary seal."

   In these instances, Ganek said, an out-of-state company generally sends a packet of documents. The parties then meet to watch the buyer sign the documents. A lawyer may be present, but, not having prepared the documents, he can't answer any questions about them. The lawyer is simply there to satisfy the legal practice requirement.

   "Some companies have seen fit to skip the lawyer altogether," he said.

   Ganek said the consumer has little protection if out-of-state companies-which he derided as "Closings R Us"-take buyers' money and are never heard from again. On the other hand, he said, lawyers have the training, the ethical and fiduciary requirements, the professional liability insurance and the possibility of bar discipline to help ensure they do a proper job.

   During his remarks, Omni National Bank's Klein pointed out that banks legally prepare deeds to secure debt every day, "sometimes with lawyers, sometimes not." So some nonlawyers already do solid deed work under certain exceptions.

   Opening up the closing process to nonlawyers, he said, would drive down prices. His wife, he said, recently paid about $4,300 in legal costs to sell her home. A title company, he said, could have closed for $100.

   What if Something Goes Wrong?

   But Klein's arguments met a tough crowd. Committee member Bruce P. Cohen asked Klein what the buyer does if something goes wrong with the sale.

   "Who disbars the title company?" he asked. "Who does the buyer call? What is the phone number?"

   Cohen pointed out that if a buyer doesn't hire a lawyer and buy title insurance, he's not protected. And if a buyer retains a lawyer and buys insurance, the costs would be about the same as they are under the current system.

   "All you're doing is passing the cost off to the consumer," he said.

   "I want the consumer to have the choice," Klein responded. "I don't know what the consumer chooses."

   "You're not giving them a choice," Cohen said. "You're backing them against a wall."

   State Bar Real Property Law Section Chairman Jeffrey O. Bramlett, of Bondurant, Mixson & Elmore, said that the potential for abuse by nonlawyers, and the difficulty of going after them in the event of a mishap, should lead the bar to retain its rule.

   He displayed a projection of the Web site for Title2Land, Bennett's company, for the audience. Bramlett pointed out that the company had changed its name several times and used a Georgia licensed attorney who lives in Baton Rouge to handle closings in Georgia. He asked, what does the consumer do if the money disappears?

   "The public interest lies with the system we've got," he said.

   Having his company used as a bad example roused Bennett to speak after all the scheduled speakers had finished. Bennett said the name changed because of a merger and a buyout. He added that all names may be traced through the Louisiana Secretary of State. He said he reluctantly came to Georgia to do business.

   "I'll be glad when I can leave this state because you know what? It's too much trouble," he said.

   Bennett told the audience that his company handles "more closings than y'all will do in a lifetime." His clients, he said, are banks and title companies who contract work out to him because Georgia closing attorneys hold up closings "for weeks and weeks and weeks." When a client contacts him, Bennett said, he sends a Georgia lawyer out to check the title and vouch for it. Then he reports back to the title insurer.

   "You know what? You're going to lose that Mercedes," he said. "Title companies will do a better and a faster job."

LOAD-DATE: March 25, 2003
Copyright 2003 Dolan Media Newswires
Wisconsin Law Journal (Milwaukee, WI)

March 19, 2003 Wednesday

SECTION: NEWS

LENGTH: 1860 words

HEADLINE: Meet Milwaukee's candidates for the State Bar of WI's Board of Governors race

BYLINE: Jane Pribek

BODY:

   Coming soon: ballots for the State Bar of Wisconsin's officers and Board of Governors. Look for them in your mailbox after April 7, to be returned on or before April 25.

   It's customary that there are more candidates than there are available seats for the governors in Milwaukee, and this year is no exception. Eleven candidates are vying for seven spots representing State Bar District 2.

   The Wisconsin Law Journal recently spoke with several of the candidates in Milwaukee asking about their unique qualifications to serve as governors, and about the big issues facing the bar.

     Incumbents, Etc.

   Among the incumbents is James M. Brennan. He served as a governor from 1997-2000, until he was elected to serve as chair of the Board of Governors. He returned as a governor the following term. He has also served on the bar's Executive Committee under the five most recent bar presidents, and he chaired that committee when past-president Gary L. Bakke was in office.

   Brennan brings the most State Bar Board of Governors experience, and, he says, it's helpful to have a member on the board who knows the bar's business. But he's still somewhat of an "outsider" because he is also a legal services attorney, he notes. Accordingly, his top concerns are the bar's efforts to ensure the provision of legal services to the poor in both the civil and criminal arenas, and pro bono.

   "I see some great opportunities coming with the Legal Assistance Committee's statewide pro bono plan, that will be rolled out next year hopefully," Brennan says.

   He also has familiarity with the bar's newly-adopted strategic plan, and hopes to assist in its implementation.

   Brennan has been a strong supporter of the bar's diversity measures, such as its "Building Bridges" program. He favored the bar joining as an amicus curiae supporting the University of Michigan Law School's use of racial data in its admissions policy in a U.S. Supreme Court case, Grutter v. Bollinger, et al. However, the Executive Committee ultimately did not take that position.

   Another incumbent is Peter D. Kafkas, an administrative law judge with the Department of Hearings and Appeals and a former practicing attorney.

   Kafkas was elected to the board in 2001, and points out that he has a perfect attendance record for board meetings. Board experience is helpful, he adds, because it has given him insight "into the fine job Wisconsin lawyers do in serving their clients and the public, the time and financial constraints many of our attorneys face, and how to use the procedures and relationships within the board and with the State Bar staff to reduce regulatory and fee requirements on our lawyers."

   The biggest task before the Board of Governors, he continues, is working with bar members to increase respect for the legal profession and improve its public image.

   "However, placing additional time keeping burdens on our attorneys by requiring them to keep track of, and annually report, their pro bono work is not an appropriate tool in this endeavor," he emphasizes. "The bar must work on improving the image of attorneys without increasing the time, or financial/dues burdens already facing our lawyers. The weight of diligently representing clients, working to assist the community -- in part through pro bono legal work -- and caring for families, can already be a heavy one for Wisconsin lawyers."

   Rather, the bar should seek more public recognition of attorneys who set good examples in community service and/or pro bono work, Kafkas suggests.

   The final incumbent -- and the most recent addition to the board -- is Elaine E. Richards, whom the governors approved to fill the seat vacated by Cory L. Nettles in January.

   Richards has been an in-house counsel at U.S. Bancorp Financial Services LLC for the past five years, and says she'll continue to bring a business perspective to the Board of Governors.

   The immediate past-president of the Wisconsin Association of African-American Lawyers also says that diversity is an important issue facing the bar and to her. As a governor, Richards will continue to reach out to the bar's minority membership, to let them know that the bar welcomes their active participation and also wants to advance their concerns.

   As for past members of the Board of Governors, at the same meeting that Richards joined the board, District 6 Governor William J. Domina resigned. Domina left because of his recent move from working in Waukesha to his new position as Milwaukee County's corporation counsel. He was on the board for three years, including service on the bar's Executive Committee, and says the bar's leadership urged him to run for the board again, this time as a Milwaukee representative.

   Then there's a liaison in the running. Andrew J. Chevrez has represented the Wisconsin Hispanic Lawyers Association as a liaison to the Board of Governors for two years as part of the "Building Bridges" program, and would now like to serve as a full-fledged member with voting rights as well as floor privileges. Chevrez is an employment lawyer with Shneidman, Hawks & Ehlke.

   Having served as a liaison, Chevrez said, "I am aware of how the BOG operates as well as the issues which they have been addressing. I have a strong record of involvement in state and local bar activities which only enhances my ability to effectively represent District 2.

   "The State Bar must show meaningful leadership on issues affecting the administration of justice and the legal profession as a whole. I would support a proactive approach in speaking out on issues that matter to our membership."

   New Faces

   As for the new faces vying for spots on the Board of Governors, most are not so new to the Milwaukee legal community.

   For example, family lawyer Barbara L. Burbach, of Burbach & Stansbury S.C., is running for a governor's seat. She is a past-president of the Milwaukee Bar Association and currently serves as president of the MBA's Foundation. That experience has provided her with leadership qualities, she says, adding, "My involvement with various State Bar committees over the years has enabled me to engage with lawyers throughout the state and heighten my awareness of the different perspectives of lawyers that are peculiar to the location and nature of their law practices."

   As for challenges facing the bar, Burbach opines, "One of the bar's greatest roles is to monitor legislation and provide public education about the law to the citizens of Wisconsin. To achieve this, it is appropriate that the bar assist in the development of the law, both legislatively and judicially. The current economic and political environment and lack of sufficient resources will severely impact the bar's ability to meet these needs. As a board member, my efforts will be focused on meeting this challenge."

   Another familiar face in the race in Milwaukee is Gwendolyn G. Connolly, a business lawyer and solo practitioner who serves as the immediate past-president of the Association for Women Lawyers.

   Connolly says what makes her unique as a candidate is that she has worked in firms of all sizes: large, small and in a solo practice. Moreover, her focus is law practice management.

   "One of the more striking challenges for the bar is assisting attorneys in meeting their professional duties while at the same time being successful business owners. Perhaps more than at any time previously, more attorneys are feeling the stress of a changing marketplace for legal services combined with the demands of our profession," she observes.

   "In order to remain relevant to our members, the bar needs to identify the areas where lawyers are most vulnerable as professionals and business owners and provide assistance in helping them be successful in both capacities."

   Like Burbach, another former Milwaukee Bar Association president is also in the running. D. Michael Guerin, of Gimbel, Reilly, Guerin & Brown, says, "I'm proud to be a lawyer and I believe the lawyers in Wisconsin are respected by non-lawyers and by our clients. It is the Board of Governors' responsibility to maintain that level of respect and assure we all act consistently with that charge."

   According to Guerin, bar leaders should know when to lead, and when to let others do their jobs. "I believe it is the board's responsibility to set policies and assure the policies are implemented by our very competent professional staff. I do not believe that the board should micro-manage the day-to-day administration of the bar."

   Guerin says that the bar needs to be as inclusive as possible, in light of its mandatory membership requirement. "A significant challenge to the board is to remain focused on its primary objective of serving all of the members to allow them to serve the public interest. ... While there are many legislative and social issues of concern to individual members, groups outside of the bar can, and should, advocate positions on such issues. But the State Bar should not be viewed as a political body advocating special interests."

   Also in the race is John W. Hein, of Godfrey, Braun & Frazie LLP. Hein says he brings the ability to understand and appreciate all sides of an issue, due to his liberal arts education and 30 years of experience as a trial lawyer.

   Hein expresses concern about restoring the public's trust and confidence in lawyers. He identifies five areas where this should be addressed:

   * Defining the practice of law in a manner that will not deprive citizens of legal services, to deal with the unauthorized practice of law;

   * Explaining the rationale for the attorney-client privilege;

   * Dealing with budgetary pressures on public legal services;

   * Balancing freedom of the press against the preservation of a litigant's legitimate confidential information; and,

   * Dealing with ethics reform in government.

   Hein promises, "The approach I would propose to address these challenges is to maintain a commitment to understanding all sides of these issues, to be creative in the funding of State Bar programs and projects, and to remember at all times that the law is a profession."

   Then there's Frank T. Pasternak, a solo practitioner and plaintiffs' personal injury lawyer. Pasternak says that he has practiced at a large and a small firm, and that he would be mindful of the concerns of both groups in his decision-making as a governor.

   Pasternak adds that the biggest challenge facing the bar today is to simply remain valuable to its members. "The practice of law is complex, requiring that lawyers specialize and that firms operate efficiently in order to succeed," he explains. "As a governor, I would approach this challenge by encouraging the board to focus on ways to help members with these complexities. I would also seek to provide such information and services when and where they are convenient to members and to do so in a manner that is cost-effective."

   Finally, there's Ajit (Jay) Walia, with the Walia Law Offices. He graduated from Marquette University Law School last May.

   Walia and Domina could not be reached for their comments.

   Next week: WLJ will look at the races in Districts 9 and 11.

LOAD-DATE: March 19, 2003
Copyright 2003 ALM Properties, Inc.

All Rights Reserved.
Legal Times

March 17, 2003

SECTION: IN HOUSE MONTHLY; Pg. 22

LENGTH: 1042 words

HEADLINE: Administrative Assistance
When lawyers are spending too much time on running the department, consider hiring a professional administrator to take over those tasks-and let the lawyers get back to serving your clients. By Debra L. Rhodunda

BYLINE: By Debra L. Rhodunda

BODY:

   As a company's legal needs change, managing attorneys and general counsel should consider how much time they spend on administrative tasks that take time away from client matters and managing outside counsel. Employing a legal administrator allows certain tasks to be delegated, freeing up attorney time for more substantial matters.

   It would be nice if there were hard-and-fast rules about when it's time to hire an administrator, for example, when you get to X number of attorneys. Unfortunately, there is no magic formula or rule. What normally drives law departments to hire their first administrator is a fear that things are slipping through the cracks -- a fear that usually peaks when turnover rises or morale plunges.

     What can administrators do? In corporate or government law departments, administrators have assumed increasing stature and responsibility.

   The functional responsibilities of law department administrators vary, but typically cover management and oversight for these areas:

   * General office business administration: including policies and procedures such as operational processes and file management;

   * Financial management: financially oriented tasks such as budgeting and business/financial planning, invoice tracking, and payment;

   * Human resources management: professional and support staff recruitment and supervision, compensation, and benefits;

   * Systems management: tasks related to information technology;

   * Facilities management: space assignments to nonlawyer personnel, maintenance and housekeeping, etc.; and

   * Special projects: projects such as client surveys and retreats.

   Depending on experience, law department administrators may also perform more complex work, such as strategy for outside counsel management.
 
The Right Person

   There are many factors to consider when evaluating candidates. In 1995, the Association of Legal Administrators conducted an extensive study and analysis of the occupation, and identified 47 competencies in these categories:

   * Strong human relations skills

   * Communication skills, both written and oral

   * Knowledge of legal industry matters

   * Leadership skills

   * Technology and project management skills. Today's law department administrators must have a good understanding of related technology and how it can benefit the law department.

   * Accounting skills. Law department administrators need to understand accounting and financial principles. They especially need the ability to implement solid internal controls and collection and billing procedures.

   Sounds like common sense, right? What sets good candidates apart from ideal candidates are the following characteristics:

   * The ability to accomplish tasks. As an implementer, the administrator is a problem solver who gets things done. Whether it's completing the budget, recruiting for a replacement paralegal, or preparing agendas for senior staff meetings, the administrator can be trusted to accomplish goals and not let anything fall through the cracks.

   * Negotiation skills. A good administrator must be able to mediate between the conflicting demands of lawyers and staff; between lawyers; or between staff units and clients on such matters as budgets, promotions, and compensation. This person needs good judgment to know when to fight and when to compromise.

   * Familiarity with the company. An administrator must know whom to go to for help and what resources are available within the company. According to the 2003 Law Department Legal Administrator Compensation Survey [March 2003, Altman Weil Publications Inc.], more than 60 percent of administrators are hired from within the organization.
 
Compensation Questions

   Finally, when the law department's needs are reviewed and the candidates are being interviewed, do you know how much to offer? How do you justify to corporate human resources that a legal administrator is worth X amount of money when this is a new position?

   Consulting secondary legal-specific compensation surveys is a good start. They are not, of course, the only tool. No survey can measure all of the special requirements and duties that distinguish one specific position from another. However, survey data can help position compensation within an industry and a region. This data is just a starting point, since compensation should depend on an individual's day-to-day responsibilities, training, length of employment and performance, as well as the internal equities of a corporate compensation system.

   The recently released compensation survey by Altman Weil indicates that the average national compensation [salary and bonus] is $89,000. Some administrators are paid as much as $130,000.

   Compensation depends on a number of factors, including department size, type of industry, and geographic location. Survey data reveal that total cash compensation for a department of more than 50 lawyers can be up to 50 percent higher than administrator compensation for a department with fewer than 15 lawyers.

   The Association of Legal Administrators reports compensation and benefits for administrative positions at hundreds of law firms and law departments. [The ALA's survey is available by contacting the headquarters office at [847] 816-1212 or www.alanet.org.]

   Most important, the law department must balance what it finds in surveys with day-to-day responsibilities and expectations. What if the "right" number is not one with which the department, or the company, is comfortable? Then reassess the law department's needs, and compromise where possible.

   Legal administrators should be reviewed at regular intervals -- at least annually. Performance feedback is extremely important because it provides an opportunity for candid discussions that help administrators better understand expectations.

   Good administrators will more than pay for themselves through the consistent application of good management skills. And if you leave your administrator alone to do the job, you will free yourself and other lawyers of unnecessary administrative burdens, so you can focus on serving your clients.

    [n]. The 2003 Law Department Legal Administrator Compensation Survey is available at [888] 782-7297 or https://store.altmanweil.com.

LOAD-DATE: March 17, 2003
Copyright 2003 ALM Properties, Inc.

All Rights Reserved.
New Jersey Law Journal

March 17, 2003

LENGTH: 1485 words

HEADLINE: Romano et al v. Chapman et al,
New Jersey Superior Court, Appellate Division
REAL PROPERTY -- Attorneys -- Residential Real Estate Contracts -- Three-Day Review

CASE-INFO: A-3478-01T2; Appellate Division; opinion by Stern, J.A.D.; decided and approved for publication March 6, 2003. Before Judges Stern, Coburn and Collester. On appeal from the Chancery Division, Morris County, C-180-01. [Sat below: Judge MacKenzie.] DDS No. 34-2-3021

BODY:

   The parties entered into a form agreement, prepared by a real estate broker, on Wednesday, September 19, 2001. It included the standard three-day review provision. On Friday, September 21, 2001, the attorneys for the parties spoke; plaintiff-buyers' attorney's only requested change was an amendment to permit the buyers to purchase the property in the name of a holding company. Defendant-sellers' attorney faxed a letter approving the change to plaintiff-buyers' attorney, with a letter declaring that the attorney review was complete. [Defendants' current counsel did not represent them at the time and did not write the letter.] The buyers' attorney faxed sellers' counsel stating "attorney review is confirmed as complete."

   On Monday, September 24, 2001, a new buyer finalized what the sellers deemed to be a better offer, and defendant-sellers, still within the three-day review period [as calculated by the form's provision for "counting the time"], hand-delivered a letter to plaintiffs' attorney from their attorney "hereby disapproving" the contract of sale pursuant to the attorney-review clause. [A reason need not be given for rejecting the agreement during "attorney review," Levinson v. Weintraub, 215 N.J. Super. Id. at 277.] The buyers' attorney informed the sellers' attorney that the contract was not "lawfully voided" and that the buyers desired to continue with it; no closing occurred.

     Plaintiffs appeal from an order of the Chancery Division denying their application for injunctive relief, dismissing their complaint for specific performance by defendants, and vacating prior temporary restraints. The trial judge, relying on Levinson v. Weintraub, 215 N.J. Super. 273, 277 [App. Div. 1987], certif. denied, 107 N.J. 650 [1987], which stated that, so long as "attorney disapproval is registered within three days, there can be no contract, regardless of prior approvals," concluded that the contract becomes "binding at the end of the three-day period and not if and when the attorneys approve the terms"; since defendants' counsel disapproved the contract within the three-day period, the judge held that defendants had properly terminated the contract, notwithstanding both counsel's prior approval.

   Held: The narrow legal issue here is whether the three-day review was designed to permit each party to consult with counsel and obtain legal advice about the contract, therefore confirming a binding agreement once the attorneys for both parties agree to the language of the previously executed agreement, or whether the three-day period was designed to permit a "timeout period," or period of reflection "to accommodate a rethinking of the entire transaction," id. at 277, in which the parties can consider whether they want to go through with it.

   The history behind the provision reflects that it was designed to give the parties an opportunity for their attorneys to review the form agreement, and that once it has been approved by the attorney, as the agent for the party, the agreement remains binding on the client if accepted in that form by the other party. Of course, the attorney could reject the agreement under the three-day review provision, could recommend revisions to the contract, or even seek an extension of the three-day review period for a mutually agreeable time. Kutzin v. Pirnie, 124 N.J. 500, 508-09 [1991]. Moreover, parties can have the attorney wait to the last moment to approve the agreement, or take no position at all before the midnight hour, thereby giving the client an opportunity to reflect and reverse the decision. But here counsel for the sellers indicated approval of the agreement in a form approved by the purchasers, and the trial judge should not have permitted defendants to withdraw from it.

   Under its plenary authority over the practice of law, the Supreme Court has authorized licensed real estate brokers and sales persons to use form residential real estate sales agreements. New Jersey State Bar Ass'n v. New Jersey Ass'n of Realtor Boards, 93 N.J. 470 [1983], modified 94 N.J. 449 [1983], makes clear that the concern of the Court related to the unauthorized practice of law by realtors and the need for parties to residential real estate agreements to have the opportunity to consult with counsel about the transactions they had entered.

   Once the attorney undertakes the review and approves the agreement, the client cannot escape the binding agreement unless the attorney for the other party, within the three-day period, makes a change [or responsive change] that counsel does not approve. It is significant that the conspicuous language at the outset of the form agreement notes that "this is a binding contract that will become final in three days." [Emphasis added.] It is in the public interest for members of the public to recognize that agreements they sign are binding contracts.

   The settlement approved in New Jersey State Bar Ass'n and in the form agreement permits cancellation by the attorney and only the attorney, within the three-day review period, as calculated by the required "counting the time" provision, or the attorney modifies it in a manner not acceptable to the other party within the three-day period, or the review period is mutually extended. See Kutzin v. Pirnie, 124 N.J. at 508-09; Carmagnola v. Hann, 233 N.J. Super. 547 [App. Div. 1989].

   While language in Levinson v. Weintraub is supportive of the decision of the judge below, that case is distinguishable. It held that attorney review was not precluded because an attorney signed the contract on behalf of the seller-estate. The court said that the purpose of the three-day review "is to protect parties against being bound by broker-prepared contracts without the opportunity to obtain adequate protection of their separate interests," 215 N.J. Super. at 277, and emphasized that its determination was limited to the facts; it expressed "no opinion as to the effect of an independent agreement by the parties, with or without the advice of counsel, to be bound by the contract within the three day period." Id. at 278.

   Although attorneys can be instructed to delay a decision or communication to the last possible moment, in case a better offer comes along or the clients desire to change their minds, the clients cannot approve an agreement through the attorney, or send a change acceptable to the other party, and then change their minds because a better offer is received within the three days. Stated differently, once the attorney has the opportunity to review the agreement and consult with the client, and the agreement is approved, with or without changes, the client cannot back out of the agreement, even within the three-day period.

   Plaintiffs have also asserted that the notice of disapproval was not consistent with the contract requirement. The issue was not addressed by the trial judge, and need not be passed on here. However, it is noted that the settlement approved in New Jersey State Bar Ass'n prescribes a form "notice of disapproval," 93 N.J. at 476, as modified in 94 N.J. 449, that must be complied with. As in Kutzin v. Pirnie, 124 N.J. at 507-09, it is not necessary to pass on whether timely actual notice to the other party through their attorney is sufficient.

   One other matter deserves comment. Defendant Robert Chapman is a real estate sales agent. Although acknowledging in his deposition that his attorney was authorized to represent the buyers, he did not have "specific authority" to do what he did, as opposed to "a general authority to conduct attorney review." Chapman testified that he was never consulted about whether the contract change was acceptable, and that he had a problem with the acquisition in the name of a limited-liability company.

   The issue of authority was not addressed by the trial judge in his opinion. Defendants do not expressly assert the lack of authority as a ground for sustaining the judgment, and in their reply brief plaintiffs assert that the issue has been waived. The subject is not commented on here.

   Reversed and remanded.

   -- Digested by P.R. Chenoweth

   [The slip opinion is 14 pages long.]

   For appellants -- James M. DeMarzo [O'Donnell, McCord, Helfrich & DeMarzo; DeMarzo and David N. Heleniak on the brief]. For respondents -- William R. Connelly [Connelly and Carole White-Connor on the brief].

LOAD-DATE: March 17, 2003
Copyright 2003 FDCH e-Media, Inc.

(f/k/a Federal Document Clearing House, Inc.)
Federal Document Clearing House Congressional Testimony

March 4, 2003 Tuesday

SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 2835 words

COMMITTEE: HOUSE JUDICIARY

SUBCOMMITTEE: COMMERCIAL AND ADMINISTRATIVE LAW

HEADLINE: BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2003

BILL-NO:
H.R. 975              <=1>  Retrieve Bill Tracking Report
                       <=2>  Retrieve Full Text of Bill

TESTIMONY-BY: LAWRENCE A. FRIEDMAN, DIRECTOR

AFFILIATION: EXECUTIVE OFFICE FOR U.S TRUSTEES

BODY:

   STATEMENT OF LAWRENCE A. FRIEDMAN DIRECTOR EXECUTIVE OFFICE FOR U.S TRUSTEES

   SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW COMMITTEE ON THE HOUSE JUDICIARY

   MARCH 4, 2003

   Mr. Chairman and Members of the Subconnmittee:

   I appreciate the opportunity to appear before the Subcommittee on behalf of the Department of Justice to discuss the United States Trustee Program's ongoing work to combat fraud and abuse under current bankruptcy law, as well as the potential enhancement of this work through omnibus bankruptcy reform legislation.

   The Department believes that provisions proposed in H.R. 975, which was introduced on February 27th, would provide important new statutory tools to assist the United States Trustee Program in identifying and civilly prosecuting misconduct by debtors and others who misuse the bankruptcy system.

   The United States Trustee Program (USTP or Program) is the component of the Department of Justice with responsibility for the oversight of bankruptcy trustees and cases. Our nnission is to enhance the efficiency and the integrity of the bankruptcy system. In October 2001, the USTP conninenced a National Civil Enforcement Initiative to address bankruptcy fraud and abuse. The Program undertook this Initiative for several reasons, including the following:

   The bankruptcy caseload is the largest in the federal court system. Disrespect for the bankruptcy system breeds disrespect for the entire judicial system. As the bankruptcy caseload continues to climb, more and more Americans are coming into contact with the nation's bankruptcy system. In addition to the 1.5 million individuals and businesses that sought debt relief in Fiscal Year 2002, nnillions more were affected, including creditors, many of them small businesses; employees; retirees; and families.

 It is critical that this system of justice be respected as one in which the law is strictly and fairly enforced.

   The integrity of the bankruptcy system relies upon complete and accurate disclosure by debtors and other participants in the system. The bankruptcy system largely depends upon self-reporting by debtors of their assets, liabilities, and other financial affairs. There is a consensus among bankruptcy professionals, including judges and practicing lawyers, that documents filed by debtors, petition preparers, and even attorneys who represent parties in a bankruptcy case too often are inaccurate and ignore the requirements of the Bankruptcy Code and Rules.

   The monetary stakes in the bankruptcy system are substantial. Studies show wide disparity in potential criminal and non- criminal abuse of the bankruptcy system. But with more than 1.5 million new cases filed each year, more than $5 billion disbursed annually by private trustees in chapter 7, 12, and 13 cases, and hundreds of billions of dollars in corporate assets and liabilities subject to chapter 11 protection, potential recoveries are staggering.

   The National Civil Enforcement Initiative was designed for two major purposes:

   (1)To Address Debtor Misconduct: Under this prong of the Initiative, the Program uncovers such improper conduct as inaccurate financial disclosure, misuse of social security numbers, concealment of assets, and "substantial abuse" by those who seek discharge of debts despite an ability to repay.

   The primary civil remedies sought by Program attorneys are disnnissal under 11 U.S.C.  707(a) acid (b) and denial of discharge under 727.

   (2)To Ensure Consumer Protection: The Program also seeks to protect debtors and creditors who are victimized by those who nnislead or nnisinfonn debtors, file bankruptcy petitions without a debtor's knowledge, make false representations in a bankruptcy case, or commit other wrongful acts in connection with a bankruptcy filing. Primary targets are unscrupulous bankruptcy petition preparers and attorneys. The primary remedies sought are fines and injunctions under 11 U.S.C.  110 and disgorgement of fees under 329.

   In addition to civil remedies taken by the Program, actions that constitute criminal misconduct are referred to the FBI and the United States Attorney for prosecution.

   As we have devoted more resources to civil enforcement, we have identified patterns of conduct that appear widespread and deserving of continued intensive pursuit. Some examples follow.

   Substantial Abuse: As our offices more carefully screen chapter 7 petitions, we have ferreted out a high number of cases which, under almost any court standard, show substantial abuse by debtors who fail to disclose their true financial condition and seek to discharge debt despite an ability to repay all or part of that debt.

   On March 5, 2002, the bankruptcy court for the Central District of California granted the U.S. Trustee's motion to dismiss the case of a debtor for substantial abuse under I 1 U.S.C.  707(b). The U.S. Trustee argued that the debtor's monthly mortgage and utility payments in excess of $6,700 were patently unreasonable. The debtor, who had filed for bankruptcy on the eve of foreclosure on her home which she valued at $900,000, had also filed for chapter 13 relief two tunes since 1997, in each case to prevent foreclosure. In her most recent filing, the debtor did not list her prior filings or other material information including rental income and a $93,000 second trust deed on her home. The bankruptcy court agreed that the debtor's excessive housing costs and the material omissions in her filing supported a finding of substantial abuse.

   In Fiscal Year 2002, the Program successfully pursued more than 5,000 debtors under 707(b) and prevented the chapter 7 discharge of almost $60 million of debt.

   Conceahnent of Assets: Debtors who conceal or transfer assets, destroy or fail to provide financial records, make false statements, or connilit other wrongful acts may be subject to denial of their discharge.

   On November 1, 2001, a debtor was denied a chapter 7 discharge following an all-day trial before the bankruptcy court for the District of Nevada. The debtor filed his petition seeking to discharge almost $650,000 in debt, without disclosing a revocable trust into which he transferred his residence, personal property, and summer home. Upon its discovery, the debtor disclosed the transfer in the fourth amendment to his schedules claiming he failed to disclose it upon the advice of counsel. The court held that the debtor's desire to retain the property, together with other facts established at trial, provided the requisite intent to deny the discharge.

   In Fiscal Year 2002, more than 800 debtors were denied a discharge of more than $40 nnillion of debt on the grounds of serious misconduct under 727.

   Credit Card Bust-Outs: Recent cases have been uncovered in which debtors obtained credit cards despite little or no income, incurred huge debts, paid those debts with worthless checks, and incurred debt up to the credit limit again before the checks bounced.

   On October 4, 2002, in Chicago, Illinois, a debtor who pleaded guilty to bankruptcy fraud and conspiracy charges was sentenced to a twelve month prison term and supervised release of three years, was ordered to pay restitution in the amount of $337,255, and agreed to waive his bankruptcy discharge. In his bankruptcy case, the debtor sought to discharge approximately $366,955 in debts; falsely represented that he had $270,000 in cash gambling losses during 2000-2001; and declared falsely under oath that he had no interest in any real property. The United States Trustee identified the debtor's credit card bust-out scheme as part of its civil enforcement efforts to review all chapter 7 bankruptcy cases filed in the Northern District of Illinois for fraud and abuse. Several members of the Chicago U.S. Trustee's office assisted law enforcement with the investigation.

   Identity Theft: The Program now requires all debtors to show proof of identity at the first meeting of creditors, which is required to be held in all bankruptcy cases. In many cases of identity theft, a person assumes someone else's identity before filing a bankruptcy case and obtains credit, along with goods and services, using that false identity. Often these crimes are not uncovered until years later when the victim tries to buy a home or obtain credit for some other purpose.

   On January 28, 2002, a debtor pleaded guilty in the Northern District of Georgia to seven counts of a nine count indictment charging him with wire fraud, mail fraud, the use of a false social security number, identity theft, and bankruptcy fraud. The debtor worked for a mortgage broker and originated and processed his own loans. He used the name, social security number, and credit history of another individual to obtain two loans to purchase real property, inducing a lender to wire transfer more than $428,000 to the settlement agent. When the debtor defaulted on the loans, he filed for bankruptcy to stay the foreclosure sale. The Atlanta office of the U.S. Trustee referred the matter to the U.S. Attorney.

   In Fiscal Year 2002, the Program identified 8,000 debtor identification problems and caused debtors to correct more than 6,000 petitions. Many of these cases involved typographical errors in social security numbers that were corrected to prevent future injury to unsuspecting, potential victims. Other cases involved intentional fraud.

   Bankruptcy Petition Preparers: Some of the most egregious abuses in the bankruptcy system are perpetrated by those who prey upon debtors. Most people who file bankruptcy are in dire financial straits and are ill-equipped to scrutinize offers of assistance. Many of these debtors face imminent foreclosure on their homes. Non-attomey bankruptcy petition preparers solicit clients from publicly available lists of those facing foreclosure.

   Petition preparers sometimes charge exorbitant rates, engage in the unauthorized practice of law, file bankruptcy cases without the knowledge of debtors, use the bankruptcy process to further fraudulent schemes such as mortgage fraud, or otherwise violate the law. The victims of mortgage fi-aud often are both debtors and creditors.

   In two cases prosecuted both civilly and criminally in the Washington, DC area, petition preparers defrauded both debtors and mortgage lenders by filing bankruptcy cases in violation of 110 in the names of debtors who paid significant fees to the defendants in return for refinancing or real estate services that were never provided. In one case, the defendant, while on pre- trial release, also took over properties facing foreclosure, filed bankruptcy petitions to delay foreclosure, and then rented the properties to innocent families with a purported option to buy. The renters uncovered the scheme when the mortgage lender finally was able to restart foreclosure proceedings. In one case, the victimized family of eight faced eviction shortly before Christmas.

   In Fiscal Year 2002, the Program successfully took action under 110 against petition preparers in more than 1,500 cases.

   In addition to the invigorated litigation efforts described above, the Program has taken other significant actions to uncover fraud and abuse. Last sunnier, the Program conducted audits of a small sample of chapter 7 cases in a pilot program we hope to esparnd in Fiscal Year 2003. The results of the pilot are being reviewed now to determine the best methodology to employ a more widespread audit effort. The results of the audit will help determine the scope of fraud and abuse in the bankruptcy system, as well as identify specific cases for civil and criuminal enforcement actions.

   Because public outreach is also important, the Program is developing an informational video that will be distributed and made widely available for debtors and attorneys to view prior to filing bankruptcy. The video will make debtors aware of the basic bankruptcy process and the need to be forthcoming and accurate in their bankruptcy filings.

   Two other USTP activities will further strengthen our civil enforcement efforts. First, the Program will continue to provide training on the detection and litigation of abuses in the bankruptcy system for its attorneys and accountants. Similar training is also being developed for the private trustees. Second, the Program has designed a new data collection system to measure our success in civil enforcement and has begun to automate data collection to reduce the reporting burden on field staff and to increase the accuracy of the infonnation.

   The results of our first year after implennenting the National Civil Enforcement Initiative are dramatic. During Fiscal Year 2002, field offices reported that they took more than 50,000 civil enforcement and related actions (including cases resolved without resort to litigation) that yielded approximately $160 million in debts not discharged and potentially available for distribution to creditors. This impressive data demonstrates the scope of the problem, the skill and effectiveness of our attorneys and other staff in the field, and the need to continue our focused attack on bankruptcy fraud and abuse.

   The fraud and abuse provisions contained in H.R. 975 would increase the effectiveness of the Program's National Civil Enforcement Initiative. In fact, we already have made significant progress in preparing to implement that legislation. As we reported in testimony presented to this Subcommittee during the last Congress, we convened working groups to develop inmplementation plans for each of the major new areas of responsibility that would be imposed upon the Program under bankruptcy reform legislation. However, these plans would require modification, based upon the precise terms of the new legislation introduced in this Congress.

   The USTP's current enforcement efforts would be aided in particular by the folloNving provisions contained in H.R. 975:

   Means Testing: Section 102 amends the substantial abuse provisions in current law. In addition to permitting dismissal of cases under current standards, this codifies a specific procedure and monetary standard for reviewing individuals in chapter 7 who have primarily consumer debt and provides a more objective basis for determining which cases will be presumed abusive. This provision would provide much needed consistency in the application of abuse standards in all districts.

   Debtor Audits: Section 603 directs the Attorney General to conduct both random and targeted audits of chapter 7 and chapter 13 debtors to ensure against material misstatements. The debtor's discharge is also conditioned on cooperating with, and makiung inforination available to, the auditors.

   This provision would provide a mandate for an intensive and on- going audit program to greatly enhance current methods for the detection of fraud and abuse.

   Debtor Education and Credit Counseling: Sections 105 and 106 create new areas of responsibility for the USTP. The Program must approve and maintain a list of credit counselors -[tilde]vbo would be able to provide financial counseling to all individuals before they are eligible to file bankruptcy. The Program would also be responsible for approving and maintaining a list of those who could provide personal financial management courses, and debtors would have to complete such a course after they file bankruptcy in order to receive a discharge. This provision would address the widespread problem of financial illiteracy. These provisions also would help ensure that debtors make unformed choices before seeking bankruptcy relief and then obtain the necessary knowledge to avoid future financial catastrophe.

   Bankruptcy Petition Preparers: Under Section 221, bankruptcy petition preparers will be required to give their customers a prescribed notice that they are not attorneys and cannot give legal advice. Provisions for fines and injunctions are strengthened, and the Judicial Conference is given authority to set a maximum allowable bankruptcy petition preparer fee. This provision increases the accountability of bankruptcy petition preparers whose actions can have a devastating effect on debtors who seek bankruptcy protection to save their residences or for other legitimate purposes.

   In sununnary, the Deparrinent of Justice connnnends this Subcommittee for recognizing the serious and far-reaching nature of bankruptcy fraud and abuse. The USTP is conulnitted to combating this problem with the statutory tools at our disposal. In addition. Nve look foi-vvard to implennenting any new provision of bankruptcy law that the Congress may enact in the future. The fraud and abuse provisions contained in H.R. 975 Nvould assist the Program in carrying out its National Civil Enforcement Initiative and improving the efficiency and integrity of the bankruptcy system.

   Mr. Chairman, that completes my prepared remarks. I would be happy to answer questions from the Subconunnittee at this time.

LOAD-DATE: March 7, 2003
Copyright 2003 ALM Properties, Inc.

All Rights Reserved.
The Legal Intelligencer

March 3, 2003, Monday

SECTION: CASE; Vol. 228; No. 41; Pg. 7

LENGTH: 43 words

HEADLINE: Vitac Corp. v. Workers' Compensation Appeal Bd.
WORKERS' COMPENSATION

CASE-INFO: No. 03-0139

BODY:

   Feb. 4, 2003

   In awarding attorney fees for an unreasonable contest, the WCJ erred in awarding paralegal and law clerk fees because Section 440 of the Workers' Compensation Act does not specifically permit such an award. Affirmed in part, reversed in part.

LOAD-DATE: March 10, 2003
Copyright 2003 Gale Group, Inc.

ASAP

Copyright 2003 Florida Bar
Florida Bar News

March 1, 2003

SECTION: No. 5, Vol. 30; Pg. 11; ISSN: 0360-0114

IAC-ACC-NO: 98594396

LENGTH: 549 words

HEADLINE: UPL update.

BYLINE: Holcomb, Lori S.

BODY:

    In November 2002, the Supreme Court of Florida issued an interesting opinion against a nonlawyer practicing immigration Jaw in Florida.

    The opinion, The Florida Bar v. Erdon Abreu, Case No. SC01-2019 (Nov. 27, 2002), is interesting because of the procedural posture of the case. The Florida Bar had filed a petition against the unlicensed practice of law against Abreu, alleging that he provided legal advice to individuals in immigration matters. An order to show cause was issued and Abreu was served. However, he failed to answer as ordered by the court. As he failed to answer, The Florida Bar filed a motion to decide the case on its merits.

      Normally, the court would rule on the motion by either entering an order issuing an injunction or entering an order appointing a referee. In this case, the court issued a 10-page opinion outlining the harm that could take place when nonlawyers give advice in immigration matters. The opinion also reaffirmed long-standing case law finding that it constitutes the unlicensed practice of law for a nonlawyer to offer to provide or to provide legal advice or services in the area of immigration.

    Facts

    The Florida Bar's petition against the unlicensed practice of law contained two counts. The first count involved a woman who sought Abreu's services in making a claim for temporary protection status with the INS. Abreu told her that he was an attorney and qualified to provide assistance in immigration matters. She paid Abreu for the preparation of the necessary forms and filing fee. Abreu paid the INS with a personal check that bounced. The application was denied for failure to pay the filing fee.

    The second count involved a couple who went to Abreu for immigration services. Abreu told them that he was an attorney and could represent them before the INS. The couple paid Abreu $3,450 for his services. Abreu prepared forms and documents and accompanied the couple to a hearing but later told them that he could prepare their paperwork but could no longer attend hearings. After paying more money, Abreu informed the couple he could no longer represent them and they should seek another attorney.

    Findings

    The Florida Supreme Court found that Abreu's actions constituted the unlicensed practice of law. In doing so, the court reaffirmed a 1995 opinion where it found that preparing forms to effect a change in immigration status requires legal training and familiarity with the immigration laws and that failure to properly prepare the forms could lead to great public harm, including deportation. However, the court also noted that the immigration regulations allow nonlawyer representation in very limited circumstances, including not charging for the services. Finding that Abreu did not fall within any of the exceptions, the court issued an injunction and awarded costs to The Florida Bar.

    Investigations regarding the unlicensed practice of law are complaint driven. If you have information that someone is engaging in the unlicensed practice of law, contact The Florida Bar's Unlicensed Practice of Law Department at (850) 561-5840. You can also obtain a UPL inquiry/complaint form on the Bar's Web site, www.flabar.org. Just put unlicensed practice of law in the search box and follow the links.

IAC-CREATE-DATE: March 11, 2003

LOAD-DATE: March 12, 2003
Copyright 2003 NLP IP Company, Inc., a Subsidiary of
American Lawyer Media, Inc. All Rights Reserved
E-Commerce Law & Strategy

February 2003

SECTION: Vol. 19; No. 10; Pg. 1

LENGTH: 1102 words

BYLINE: Michael Lear-Olimpi is the Editor-in-Chief of this newsletter. He can be reached via e-mail at learolimpi£aol.com.

BODY:

    US Objects to ABA's Proposed Model Definition on the Practice of Law

    FTC, DOJ: Could hurt

   e-commerce, raise costs

   By Michael Lear-Olimpi

   When the American Bar Association (ABA) released its draft Model Definition of the Practice of Law in September 2002, nonlaywers performing some legal-related tasks weren't alone in taking alarmed notice.

   The US Federal Trade Commission (FTC) and Department of Justice (DOJ) noticed, too.

   Although the ABA said it drafted the proposal -- which it hopes will be final by this August -- to protect the public, the government believes the proposal would bring consumers unnecessary costs and harm competition for some legal services among certain nonlawyer professionals and businesspeople.

   In fact, the proposal which doesn't address electronic legal services and which does provide some exceptions, such as for pro se representation and mediation is so broadly written that even some committees of the ABA oppose it or parts of it as drafted. The ABA's Section of Antitrust Law, for instance, is concerned the proposal would push credit-counseling and other financial service providers out of business.

     The ABA should focus on educating consumers about when and why they might need a lawyer and not on too-widely defined practice rules that could prevent credit counselors from helping consumers or "laypersons from assisting poor immigrants fill out INS forms," the Antitrust Law Section said.

   And the eLawyering Task Force of the ABA Law Practice Management Section suggested further clarity on what constitutes the unauthorized practice of law (UPL) so that Internet legal services can continue flourishing. Increased government e-oversight The government's objection-filing is unusual, but in step with the agencies' growing concern over bar associations', courts' and legislatures' attempts to stop nonlawyers from competing with attorneys by offering some basic services lawyers traditionally handle --and usually for significantly lower fees than lawyers charge. It is also consistent with the FTC's increased policing of e-commerce activities and its efforts to promote and secure consumer rights, such as privacy, online.

   Real-estate transactions have been a popular federal government target recently. The FTC and DOJ have weighed in on efforts to curtail nonlawyers from handling real-estate closings. In letters to bar associations and lawmakers from autumn 1996 through spring 2002, the agencies urged Kentucky, Virginia, Rhode Island and North Carolina to turn such proposals down. They also filed an amicus curiae brief in 2000 with the Kentucky Supreme Court.

   In its December comments, the FTC cited consistently lower real-estate closing costs in Virginia, North Carolina and New Jersey when lay professionals instead of lawyers handled the transactions. Worries about short-circuiting e-commerce In December, the FTC released a statement containing conclusions from testimony during a three-day roundtable that looked at possible roadblocks that could stall e-commerce in 10 industries.

   Two panels -- one on online legal services and one on real estate and mortgage businesses -- mulled activities addressed in whole or part by the proposed ABA model definition.

   Narrowing the definition of the practice of law, the FTC concluded, is "likely to impede substantially the growth of e-commerce and software-based solutions." Consumers, the agency said, benefit from the plethora of choices -- and convenience and lower costs -- that the Internet and software offer.

   The agency said "over-broad restrictions on the practice of law" might impair e-commerce growth by:

   * Prohibiting or increasing cost of providing e-forms or other legal self-help software;

   * Negatively affecting Net-based mortgage lenders relying on lay real estate closers;

   * Restricting providers' scope to experiment with and develop legal-oriented Internet services directly benefiting consumers.

   Regulators fear the proposal as drafted could also crimp important services offered by such institutions as hospitals, which routinely offer living wills and other legal documents. Tenant associations and unions could also suffer, the government maintained.

   Another fear that emerged during the workshop was state regulations that were drafted to boost extant bricks-and-mortar business could end up short-shrifting new Internet competition. Experts also considered whether companies were thwarting e-commerce with nascent anticompetitive tactics.

   And Congress, the FTC pointed out, will continue scrutinizing possible slowing of e-commerce by various legal restrictions. The agency made the point that while it weighs the possible impact of such proposals as the ABA's on e-commerce, "One should proceed cautiously, mindful of the unintended consequences that may unduly limit the choices of consumers."Supporting argument with case law

   In a statement posted on its Web site, the FTC cited relatively cheap software that allows nonlawyers to draw up such legal documents as wills and trusts. The FTC contended that the ABA's proposed definition would limit Internet-service and software providers' ability to offer forms on which consumers ask basic legal questions and are furnished answers.

   The FTC noted that the ABA's task force on the proposed definition doesn't appear to address the meaning of the practice of law related to interactive software or other "electronic or automated services." But the agency cited the case of Unauthorized Practice of Law Comm. v. Parsons Technology Inc. (179 F.3d 956 5th Cir. 1999). The FTC said that in that case, legal software publisher Parsons Technology was barred from marketing a computer program in Texas, where a district court said use of the software amounted to UPL.

   Texas lawmakers later amended the Lone Star State's definition of UPL, stipulating in the change that "the 'practice of law' does not include the design, creation, publication, distribution, display, or sale ... [of] computer software, or similar products if the products clearly and conspicuously state that the products are not a substitute for the advice of an attorney."

   The ABA had scheduled a public hearing on the proposal Feb. 7 in Washington and discussion early in the month for a meeting in Seattle.

   The proposal is accessible on the ABA's Web site. Go to www.abanet.org/cpr/modeldefdefinition.html.

   ABA's Web site also features a list of states' definitions of the practice of law at www.abanet.org/cpr/modeldefstatutes.html.

   The FTC's Web site is www.ftc.gov.

LOAD-DATE: March 25, 2003
Copyright 2003 The Arizona Republic

All Rights Reserved
The Arizona Republic

January 23, 2003 Thursday Weekly Edition

SECTION: FRONT; Pg. 1

LENGTH: 587 words

HEADLINE: COURT APPROVES LICENSING; FOR PREPARERS OF LEGAL DOCUMENTS

BYLINE: By Mike Fimea, Arizona Business Gazette

BODY:

   In a move that didn't seem possible nine months ago, the Arizona Supreme Court has approved regulation and a licensing program for the state's document preparers.

   The rule, which takes effect July 1, allows preparers to continue drawing up legal documents and providing basic information to clients. Preparers must be certified and pay $300 for a license (renewable every two years after the initial license expires). A certification test will be in place by July 1, 2005.

     An 11-member board appointed by the high court will oversee the licensing and handle any consumer complaints. The panel will include five certified preparers with at least five years of experience.

   "It was a relatively peaceful outcome," said Allen Merrill of Mesa-based Legal Solutions Inc. "Document preparers can continue to operate without being restricted in a lot of ways, and there's a mechanism in place to get rid of the bad guys."

   Merrill and his colleagues were outraged when the State Bar of Arizona submitted the rules change in April. The Bar claimed it wanted to clamp down on the unauthorized practice of law, but document preparers saw it as a way to put them out of business.

   "The Bar has been trying to eliminate competition for 10 years, and they've failed each time," Merrill said in May.

   Sensing a polarized environment, the Chief Justice Charles Jones established a committee that included Merrill, state Bar attorney Fran Johansen and others.

   Over 10 weeks of meetings, the distrust and hostility slowly melted away.

   "We were prepared to look for mutual interests from the first (meeting)," said Johansen, the Bar's unauthorized practice of law attorney. "The Bar and the judicial system can't help but be concerned about the access to justice."

   Document preparers are popular because they charge much less than attorneys for similar services.

   The preparers fill out forms for divorces, wills and other routine legal procedures and submit them to the courts.

   In proposing the new rules, the Bar alleged that some preparers were also providing legal advice.

   Merrill feared a scenario similar to the California document preparer law.

   "The California statute is much more restrictive," he said. "Preparers can't give out legal information except in written form. It reduces them to the level of scriveners (notary publics)."

   The new rule allows non-lawyers to perform limited legal services, framed in terms of exceptions to the unauthorized-practice-of-law statute.

   Johansen said the exceptions apply to document preparers, "enrolled agents" (CPAs who appear in tax court) and certain government officials.

   The regulation will allow preparers to explain legal options in, for example, a child custody case.

   "I can provide information about sole custody and joint custody, but I can't say, 'you should go for sole custody.' I can't tell them what to do," Merrill said.

   Merrill said the oversight board will function like the disciplinary committee of the state Bar.

   "We anticipate there will be more complaints because of greater public awareness," he said. "We wanted to have significant representation from document preparers who understand how we work."

   Merrill credited the Bar for changing its approach and crafting a compromise.

   Johansen said the certification process satisfies the Bar's concerns for accountability.

   "Our emphasis was on consumer protection, and this is a way to make it happen," she said. "For the first time, consumers will have a place to go if they have problems."

LOAD-DATE: March 5, 2003